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الاثنين، 3 أغسطس 2015

Travis Perkins Ups Dividend As House Prices Rise

Renewed confidence in the recovering construction market has prompted builders' merchant Travis Perkins to raise its dividend by over a fifth.

Travis Perkins' half year results show that profit before tax rose 3.2% to £158.6m as the firm said the housing market was benefiting from "solid mortgage availability, continuing Government support for first-time buyers and rising house prices".

These financial results come alongside a separate Nationwide data release which showed that UK house prices have returned to growth in July.

Following a surprise blip in June, where house prices fell 0.2% in the month, July saw a recovery with prices jumping 0.4% which equates to a year on year increase of 3.5%.

The average UK house price is now £195,621, equivalent to a two-year rise of 14.5% according to Nationwide's statistics.

Commenting on the figures, Robert Gardner, Nationwide's chief economist, said: "After moderating over the past 12 months, there are tentative signs that annual house price growth may be stabilising close to the pace of earnings growth, which has historically been around 4%."

Last month the UK's biggest bank, HSBC, raised its UK house price growth forecast for 2015 - from 2% to 5%, to 5% to 10%.

Travis Perkins' investor release also pointed towards further house price growth as supply side constraints take hold: "In the UK, demand for housing continues to outpace supply.

"Population growth, immigration and a trend towards smaller family units is creating around 225,000 new households per year, while only 141,000 new homes were built in 2014."

The builders' merchants optimism means that it has raised its dividend per share by 20.4% to 14.75p.

Despite the increase to the dividend investors opted to dump its stock sending shares 3% lower. Over the last 12 months, however, shares are nearly 30% higher.